How to Stop Real Estate Garbage Fees

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wealth of penniesThere’s a dirty little secret in San Diego real estate circles that should be exposed:

GARBAGE FEES (as they are commonly known)

These are the miscellaneous FedEx fees for $35 or loan tie-in fees or “messenger” fees. Anila Whitney-Miller, Mortgage Maven at New American Funding in Orange County, just recounted on her Fascebook page how a trusted escrow company there was unable to produce receipts for messengers and Fed Ex deliveries for her clients. She is now shopping for a new escrow company who will cease the practice. Kudos to Anila for exposing the practice.

When reviewing the closing docs for a real estate transaction, it might be forgiveable to overlook these smaller charges–but they can easily run over $100 per closing. I don’t know about you, but our clients could use an extra $100 for a dinner out, new shoes for the kids or a (short) trip to Costco.

We don’t believe in nickel and diming our clients. We have never charged “transaction fees”–as some agents still do. Our fee is transparent–and we now ask the same for escrow and title companies we recommend. A seeming bargain up front that is later padded with phantom fees is no bargain, at least from our perspective. And it seems only right that if funds are spent for FedEx for messengers, receipts should be included with the closing statement.

And just in case you are not a San Diego real estate client of ours, we highly recommend that you ask your escrow company for receipts for these charges–and even warn them and your agent that you will be asking for them at close of escrow.

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